Rental yields in Sydney, Brisbane and Melbourne to be impacted: APM
According to the latest Rental Report from Australian Property Monitors (APM), the increasing supply of rental properties will continue to affect rental yields in the Eastern capital cities.
While Melbourne has experienced rising rents in houses, with median asking rents increasing by 1.4% in the December quarter, unit rents in the city have weakened, decreasing by 2.8% over the same period.
APM’s December quarter 2013 report also notes that Melbourne recorded no growth in unit rents over the year. The sluggish unit rental market is attributed in part to the development of new inner city apartments.
The report notes similar conditions in Brisbane. Although both house and unit rents increased over the December quarter, house rents increased by 2.6% over all of 2013, while unit rents have remained flat.
Sydney is still the most costly market for tenants, according to the APM report. Over 2013, house rents have stayed constant, while unit prices have increased by 5.4%, indicating the preference among tenants for inner city locations and affordability. Rental yields for Sydney houses have continued to decrease, due to 2013’s strong rise in investor activity and house prices.
The report expects that increased investment in the eastern capital cities, combined with the construction of new inner city units, will continue to push the supply of rental properties and weaken rental prices.